HSBC in Iran project financing accord

HSBC has signed a Dh1.85b ($500 million) medium-term project finance framework agreement with six Iranian commercial banks. The deal was coordinated by the Central Bank of Iran.

The deal formalises the basis for loans, secured by leading export credit agencies on either a sole or multi-sourced basis, to finance infrastructure projects in Iran by large international companies.

The Iranian banks involved in the agreement are Bank Melli, Bank Saderat, Bank Mellat, Bank Tejarat, Bank Sepah and the Export Development Bank. HSBC opened a representative office in Tehran in October last year, returning to the Iranian market after an absence of over 20 years.

During the past year, HSBC representatives in Iran have been involved in developing a broad range of commercial and investment banking activities. Moody's upgraded Iran's country rating in October. Cover limits for Iran have generally been increased by European export credit agencies over the past year, most recently by the UK's Export Credit Guarantee Department.

"There is, without doubt, going to be interest in the wide range of potential trade and investment opportunities which Iran offers to its international partners. This increases the need, in particular, for project finance.

We welcome the positive line being taken by export credit agencies on Iran. HSBC is extremely well placed to support projects for which such cover is granted," said John Richards, HSBC senior representative in Iran.